Social partners discuss renewal of national agreement

The national agreement, signed between the Lithuanian government and social partners in October 2009, expired at the end of 2010. The social partners feel the agreement is crucial to the development of relations between them and the government, even though it has not been fully implemented. Suggestions for a new agreement include calls for more involvement of the social partners, proposals to combat the shadow economy and for reforms in education, health and social security.

Evaluation of national agreement signed in 2009

The national agreement was signed on 28 October 2009 (LT0911019I) between the Government of the Republic of Lithuania (LRV) and the following social partners:

  • Lithuanian Trade Union Confederation (LPSK);
  • Lithuanian Labour Federation (LDF);
  • Lithuanian Trade Union ‘Solidarumas’ (LPS ‘Solidarumas’);
  • Union of Lithuanian pensioners ‘Bociai’;
  • Lithuanian Political Prisoners and Deportees Union (LPKTS);
  • Chamber of Agriculture of the Republic of Lithuania (LRŽŪR);
  • Lithuanian Confederation of Industrialists (LPK);
  • Association of Lithuanian Chambers of Commerce, Industry and Crafts (LPPARA);
  • Lithuanian Business Employers’ Confederation (LVDK);
  • Council of small and medium business (SVVT);
  • Investors Forum (IF);
  • Lithuanian business confederation – ICC Lithuania (ICC Lietuva).

It expired on 31 December 2010. The first anniversary of the signing of this document sparked large-scale debates among the social partners involved concerning its importance and the possibilities for its implementation and renewal.

The social partners agree that the agreement was crucial for the government which had just come into power. Against the background of the economic and financial crisis, the agreement has become a national symbol of solidarity, contributing to the balance of public finances and ensuring social stability, thus becoming a key instrument in preserving the country’s competitiveness. The agreement was also important to businesses as it guaranteed the government’s commitment not to adopt unilateral decisions; not to raise taxes or introduce new ones; and to apply balanced finance consolidation measures. It was mainly important to trade unions as a guarantee that the government would not unilaterally amend the laws regulating labour relations. These commitments have all been fulfilled.

However, the social partners have noted that many of the agreement’s provisions have not been implemented.

Employers have criticised the government mainly for:

  • delays in reducing the number of civil servants;
  • insufficient liberalism in the regulation of labour relations;
  • slow modernisation of housing;
  • unfulfilled promises to promote renewable energy and ease administrative burdens on business;
  • slow improvement of business environment.

The main point of discontent for trade unions was the lack of real social dialogue. Social partners agreed in the agreement that they would coordinate all main decisions on economic and social policy. However, many decisions were taken without any special consultations with the social partners.

Social partners’ attitudes towards a new agreement

Despite the shortcomings, all parties support, in principle, the idea of signing a new national agreement.

Government’s position

Prime Minister Andrius Kubilius is very positive about the renewal of the national agreement. He would like to see greater efforts being made by the government to combat smuggling and the shadow economy, implement structural reforms, and support small business. The Prime Minister has also emphasised the importance of issues such as streamlining institutions responsible for business control and decreasing red tape in business supervision, creation of job opportunities and reform of the energy system.

The Minister of Finance, Ingrida Šimonytė, said the new agreement should last for longer than one year. She would like to see the agreement widened to cover the reduction of the shadow economy and structural reforms in education, health and social policy.

Employers’ views

Lithuania’s largest industry employer organisation, LPK, also promises to join the new national agreement. LPK agrees that the objectives should be more long-term and suggests inviting other societal groups as well as political parties to join. According to them, one of the obstacles to implementation of the agreement is poor support from political parties. LPK also wants to see the shadow economy tackled and reforms of the social security, education and social systems.

Investors’ Forum (IF) also intends to sign up and supports the proposal for the inclusion of political parties. IF would like to see anti-corruption measures as the agreement’s primary measure, followed by tax stability and an easing of the bureaucratic burden.

ICC Lietuva also wants to sign the new agreement, but says it is necessary ‘to include not only the Prime Minister in the agreement, but also ministries and leaders of the parties in the governing coalition’.

Trade unions’ views

LPSK supports the idea of the agreement’s renewal but, like employers, would like to see political parties included in the dialogue.

LDF emphasises that trade unions will seek an increase in the minimum wage, the indexation of wages and salaries to inflation, and amendments to the Law on Trade Unions in the new agreement. Draft amendments to the Law on Trade Unions are, in general, aimed at increasing trade unions’ rights and powers and were prepared some time ago. However, they are still being considered by various ministries.

According to LDF, they will start with insisting on a monthly increase of the minimum wage from LTL 800 (€232) to LTL 1,000 (€290) and rising to at least LTL 1,200 (€348) at a later stage.

Inga Blažienė, Institute of Labour and Social Research

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